Performance pay at Safelite Auto Glass Essay Example | Topics and Well Written Essays - 1000 words

Performance pay at Safelite Auto Glass - Essay Example The proposed PPP (Performance Pay Plan) plan introduced at Safelite was initiated with the objective of increasing productivity in installation of glass units Problem arrived when it was observed that productivity in the company has become significantly low. Workers were capable of installing more but their output was not up to the mark. PPP was introduced as it can motivate workers, enhance productivity and permit the employer to differentiate among the payments to his employees. PP Plan is assumed to be an effective plan for enhancing organizational climate which was not in line with the policies of Safelite. The organizational climate determines several features of a company inclusive of responsibility, rewards, standards, flexibility, team commitment and clarity. Problems encountered in the company, are related to lower productivity and the subsequent lower sales volume. The proposed PPP is estimated to boost up the company’s morale, sales and also build long lasting relat ionship between the company and employees, partners and customers. Thus, the plan can be measured to be addressing the productivity problems encountered in the company. As evident form the case, due to implementation of PP Plan, conflict may result in between employees and managers because employees would seek for maximizing their output while managers might pay more attention towards deterioration of quality levels. Employees might pose resistance in introducing new technologies as they might feel that the new technology would have an impact on the standards of production. There might even be reduced willingness of suggesting new methods of production on the part of the employees. There can be increased complaints from the employees that machines and equipments are not properly maintained and that might arrive as a form of excuse. Experienced workers might be reluctant in helping new employees as they will have to keep high focus on their personal level of performances. All these c onsequences can lead to eminent mistrust between management and workers. Assurance of maintaining equipments all the time will be required. This might lead to increased maintenance cost for the operational department and in turn would definitely have an impact on the financial performance of the company. Solution 2 Pros and Cons of Switching from Wage-Rate to Piece-Rate Pay and Evaluation of Safelite Workers There are several advantages of piece rate system of payment that will be enjoyed by Safelite through the step that it has taken for switching from wage-rate to piece-rate system. The first advantage of piece rate system is that it encourages the efficient workers. The workers who are inclined towards working efficiently are motivated to enhance their level of performance and thus results in greater output volume for the company in turn. Through the switching decision, Safelite will be able to reduce idle time which had been an immense problem in its operation. The adopted syste m would provide incentives to workers for adopting improved method of production that will result in their improved earning as well. Safelite would be now able to determine the appropriate cost of labor per unit for submission of quotation. This system would even reduce the production cost per unit due to increased production volume. Another cost will also be reduced through this system which is supervision cost. The advantages are achievable but the switching can also result in certain disadvantages for the company. Review of the past records suggest that piece rate system is not helpful in production of quality outputs as the workers are more concerned about quantity